London's largest initial public offering of the year has been launched, with Russian tycoon Alisher Usmanov's mobile operator MegaFon confirming it intends to float before Christmas.

Usmanov – who is Russia's richest man, according to Forbes, and the second largest shareholder in Arsenal football club – is not selling any of his MegaFon holding in the float but has already enjoyed a multimillion-dollar payday this year. He was one of the early investors in Facebook and sold shares in its record $16bn IPO in May.

Usmanov took control of MegaFon in April, buying out fellow tycoon Mikhail Fridman through his company AF Telecom. Sources close to the float estimate it could raise $2bn (£1.25bn), making it the biggest in London since Glencore's $10bn debut in May last year.

Russia's No 2 mobile network by revenues and subscribers is expected to sell 15-20% of its shares, resulting in a partial exit for its other remaining shareholder, Sweden's TeliaSonera.

The first of the big three Russian networks to offer 4G mobile internet connections, MegaFon said on Tuesday it expected to float its ordinary shares on the Micex exchange in Moscow and global depositary receipts on the London stock exchange "in the fourth quarter of 2012".

Pre-roadshow meetings with potential investors are understood to be starting this week, with Morgan Stanley and Sberbank CIB leading the banking advisory team, and Citi, Credit Suisse and VTB Capital joining them as bookrunners. The new capital would be used to repay or finance existing debt and continue the expansion of the network.

"This is the right time for our IPO, which will support a new stage in MegaFon's development," the company's chief executive, Ivan Tavrin, said. "We are now positioned to exploit the further growth potential of Russia's mobile market as it transitions from voice to high-value data services."

Having invested heavily in 3G services, and with its 4G signal now available in 40 Russian cities, MegaFon has been at the forefront of the smartphone revolution and now controls more data revenues, which are generated by customers using the internet on their handsets, than any other operator.

MegaFon's revenues totalled just under £5bn in 2011, and have been growing at more than 15% annually for the last three years. It has 62 million subscribers and a 27% market share, according to AC&M, which places it behind MTS (70 million customers) and ahead of Vimpelcom (56 million).

In September, MegaFon asked the Russian markets regulator to allow it to list 123.38m shares, or 19.9% of the total, although more recent press reports have suggested the sale could be reduced to a 15% stake. If 15% of the shares are sold for £1.25bn, the float would imply an overall valuation of £8.3bn.

Analyst James Britton, at Nomura bank, estimates that MegaFon's enterprise value – which includes equity and debt – is around £11bn, equal to around 5.5 times the underlying earnings. The shares are expected to be sold at a discount to the enterprise value.

TeliaSonera said on Tuesday it would sell down from 35.6% to 25% plus one share, while intending to retain "a long-term strategic ownership". AF Telecom owns 50% plus 100 shares, and will not sell into the IPO. The remaining 14.4% is held in treasury and the company is now deciding how many of these shares will go into the sale.